'Immediate and Appropriate Corrective Action'

Although the federal courts have been relatively slow to address employer liability based on the actions of non-employees, the Second Circuit Court of Appeals recently joined the other federal appellate courts that have adopted the EEOC's guidance. In Summa v. Hosftra University, 708 F.3d 115 (2d Cir. 2013), the Second Circuit held that an employer may be liable under Title VII for acts of harassment committed by non-employees where the employer has actual or constructive knowledge of the harassment and fails to take immediate and appropriate corrective action. The Second Circuit's decision is important in two respects. First, it adopts the EEOC's guidelines consistent with other federal appellate authority. Second, it helps clarify what constitutes “appropriate corrective action” in the case of harassment by non-employees.

The Second Circuit's Decision in Summa

In Summa v. Hosftra University, plaintiff Lauren Summa was enrolled as a graduate student at Hofstra University. She also worked for the University as a manager of the football team. Ms. Summa suffered repeated harassment by team members, all of whom were students. For example, team members created insulting Facebook pages, and at least one football player made lewd comments to Summa during bus rides to and from football games. When Summa complained to the head coach of the football team, the coach promptly spoke with the players involved, ordered them to take down the Facebook posts, and ejected the player who made the lewd comments during the bus ride. Summa also reported the incidents to the Dean of Students and the university's Equality Officer. The Equality Officer explicitly acknowledged in a memorandum that the incident “offers an opportunity for educating the coaching staff and all of the Athletics staff about the University's Harassment Policy,” and then followed up by conducting anti-harassment training a few months later.

The court, adopting the EEOC's guidance, held that Hofstra University could be liable if it “failed to provide a reasonable avenue for complaint or that it knew, or in the exercise of reasonable care should have known, about the harassment yet failed to take appropriate remedial action.” Id., 708 F.3d at 124. In determining the appropriateness of Hofstra's response, the court analyzed whether the response was “immediate or timely and appropriate in light of the circumstances, particularly the level of control and legal responsibility the employer has with respect to the employee's behavior.” Id. The court found that each time Summa complained, Hofstra reacted immediately and appropriately, including disciplining the players involved, and provided training to the entire athletics department to prevent future incidents of harassment. The court concluded that “[b]ecause defendants took the needed remedial action in this case, the harassment carried out by some players on the football team cannot be imputed to the University and its personnel.” Id., 708 F.3d at 125.

Other Federal Appellate Decisions on Harassment by Non-Employees

The Second Circuit's decision is consistent not only with the EEOC's guidance, but also with the other federal appellate courts that have addressed this issue. In EEOC v. Cromer Food Servs., 414 Fed. Appx. 602 (4th Cir. 2011), an employee of a food services company responsible for restocking vending machines in various locations faced constant ridicule regarding his sexual orientation by one of the company's customers. Despite the employee's multiple complaints to supervisors, the food services company continued to dismiss the incidents as mere “joking around.” Eventually, after the employee filed a complaint with the EEOC, the company offered to place him on an alternative “early shift,” for less hourly pay. The Fourth Circuit reversed the district court's grant of summary judgment in favor of the employer, holding that the employer could be “liable if it knew or should have known of the harassment and failed to take appropriate actions to halt it.”

In Turnbull v. Topeka State Hosp., 255 F.3d 1238 (10th Cir. 2001), a psychologist employed by a state mental facility complained to supervisors about the dangers of sexual harassment posed by many of the patients. Following these complaints, which went unaddressed, the psychologist was sexually assaulted by a patient, and sued the hospital for its failure to adequately respond to her prior complaints.

Consistent with the EEOC guidelines, the Tenth Circuit found that the employer hospital could be held liable for failing to adequately protect against such harassment by its patients. “The negligence analysis can be divided into two separate inquiries, looking 'first, into the employer's actual or constructive knowledge of harassment, and second, into the adequacy of the employer's remedial and preventative responses.'” Id., 255 F.3d at 1244 (citations omitted). Notably, the court held that although “it would be impossible to eliminate all potential risk” in an inherently dangerous environment, like a state mental hospital, the fact-finder must still determine “whether the hospital took reasonable measures to alleviate known or obvious risks.” Id., 255 F.3d at 1245.

Similarly, in Galdamez v. Potter, 415 F.3d 1015 (9th Cir. 2005), the Ninth Circuit extended the scope of employer liability for harassment by non-employees to include not only sexual harassment, but also harassment based on race and national origin. There, plaintiff Arlene Galdamez, the postmaster for Willamina, OR, received multiple threats of violence against her by various constituents, which included remarks about her race and Honduran national origin. When Ms. Galdamez complained about these threats to a supervisor, she was told that “Willamina was a 'redneck town' and that she was 'tough' enough to deal with the treatment.” 415 F.3d, at 1024-25. Ms. Galdamez brought claims against the Postal Service because of its failure to remedy the ongoing harassment by Postal Service customers.

The court acknowledged that “an employer may be held liable for the actionable third-party harassment of its employees where it ratifies or condones the conduct by failing to investigate and remedy it after learning of it.” Applying this standard, the court held that the trial court erred by failing to instruct the jury on the scope of the Postal Service's potential liability.

The Seventh and Eleventh Circuits have similarly concluded that employers may be liable for harassment by third parties where they know of the harassment and fail to take prompt remedial measures. See Dunn v. Wash. County Hosp., 429 F.3d 689 (7th Cir. 2005); Watson v. Blue Circle, Inc., 324 F.3d 1252 (11th Cir. 2003).

Other federal appellate courts, including the Courts of Appeals for the First, Third, Sixth, and District of Columbia Circuits, have not had the opportunity to address the EEOC's guidance on this issue. The unanimity of the decisions by other federal appellate courts, however, suggests that the EEOC guidance will likely become the operative rule in
all jurisdictions.

Lessons for Employers

The facts and circumstances of the cases discussed above suggest some general principles that employers should follow to ensure compliance with Title VII when confronted with claims of harassment by non-employees.

First, it is critical that employers maintain reporting policies that provide employees with a meaningful opportunity to complain about harassment issues. Indeed, employers risk being charged with “constructive knowledge” of harassment, even in the absence of employee complaints, if employees do not have a meaningful process through which to raise concerns. Id., 708 F.3d at 124.

Second, employers may be charged with “actual knowledge” of harassment when an employee reports his or her concerns to a supervisor, even when the company's harassment policy requires the employee to report offensive conduct to another designated person. Cromer Food Servs., 414 Fed. Appx. at 607-08. Accordingly, companies should encourage all employees ' including both complainants and any supervisors who learn of complaints ' to report grievances to the appropriate personnel.

Third, employers should be reminded that the protections apply to all forms of employee harassment, not just sexual harassment. See Galdamez v. Potter, 415 F.3d 1015, 1022 n.5 (citing AMTRAK v. Morgan, 536 U.S. 101, 116 n.10 (2002)). Companies should be aware not only of the federal prohibition against harassment based on “race, color, religion, sex, or national origin,” as set forth in Title VII, but also of state and local laws that protect against other forms of discrimination and harassment, such as sexual orientation.

Fourth, employers should take all complaints of harassment seriously and not minimize the potential impact of offending conduct. In a number of the reported cases, employers invited potential liability by dismissing complaints as “horseplay” or “joking around,” and advising employees to “grin and bear” the harassment as part of the job.

Fifth, employers should avoid the temptation merely to remove the employee from the situation causing the concerns, because such removal may not qualify as “appropriate corrective action.” According to one court, proposing a change in work shifts or other accommodations to avoid harassment are “per se” unacceptable if they act to the disadvantage of the complaining employee. Cromer Food Servs., 414 Fed. Appx. at 607-08.

Sixth, employers should take into account the extent of the company's control over the individuals charged with harassment, as this impacts the analysis concerning the appropriate level of corrective action under the circumstances. For example, a university has more control over its students (and therefore may be required to take additional steps to remedy harassment) than a company has over its customers.

Finally, as with all instances of discrimination and harassment, employers should make sure that they conduct thorough investigations of any complaints. Employers should also keep a well-documented record of their prompt response and corrective action. This response and the corrective action should be proportional to the degree of control exercised over the non-employees.

Anthony B. Haller is a partner, and Andrew B. Cohen is an associate in the Employment, Benefits and Labor group at Blank Rome LLP. They can be reached at [email protected] or [email protected], respectively.'

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The employer's responsibility is to provide its employees with nondiscriminatory working conditions. The genesis of inequality matters not; what does matter is how the employer handles the problem.

' Judge Frank Easterbrook, Dunn v. Wash. County Hosp. , 429 F.3d 689, 691 (7th Cir. 2005).

Most employers know of their obligation, under Title VII of the Civil Rights Act of 1964, to take immediate and appropriate corrective action to prevent harassment in the workplace. Some employers, however, may not be aware that this obligation extends to preventing harassment by non-employees, including, for example, customers, patients, and university students. The Equal Employment Opportunity Commission (EEOC) has issued non-binding guidelines dealing with the question of liability for harassment by non-employees. Under the EEOC's guidance, an employer is “responsible for the acts of non-employees, with respect to sexual harassment of employees in the workplace, where the employer (or its agents or supervisory employees) knows or should have known of the conduct and fails to take immediate and appropriate corrective action. In reviewing these cases, the Commission will consider the extent of the employer's control and any other legal responsibility which the employer may have with respect to the conduct of such non-employees.” 29 C.F.R. ' 1604.11(e) (emphasis added).

Although the federal courts have been relatively slow to address employer liability based on the actions of non-employees, the Second Circuit Court of Appeals recently joined the other federal appellate courts that have adopted the EEOC's guidance. In Summa v. Hosftra University , 708 F.3d 115 (2d Cir. 2013), the Second Circuit held that an employer may be liable under Title VII for acts of harassment committed by non-employees where the employer has actual or constructive knowledge of the harassment and fails to take immediate and appropriate corrective action. The Second Circuit's decision is important in two respects. First, it adopts the EEOC's guidelines consistent with other federal appellate authority. Second, it helps clarify what constitutes “appropriate corrective action” in the case of harassment by non-employees.

The Second Circuit's Decision in Summa

In Summa v. Hosftra University, plaintiff Lauren Summa was enrolled as a graduate student at Hofstra University. She also worked for the University as a manager of the football team. Ms. Summa suffered repeated harassment by team members, all of whom were students. For example, team members created insulting Facebook pages, and at least one football player made lewd comments to Summa during bus rides to and from football games. When Summa complained to the head coach of the football team, the coach promptly spoke with the players involved, ordered them to take down the Facebook posts, and ejected the player who made the lewd comments during the bus ride. Summa also reported the incidents to the Dean of Students and the university's Equality Officer. The Equality Officer explicitly acknowledged in a memorandum that the incident “offers an opportunity for educating the coaching staff and all of the Athletics staff about the University's Harassment Policy,” and then followed up by conducting anti-harassment training a few months later.

The court, adopting the EEOC's guidance, held that Hofstra University could be liable if it “failed to provide a reasonable avenue for complaint or that it knew, or in the exercise of reasonable care should have known, about the harassment yet failed to take appropriate remedial action.” Id., 708 F.3d at 124. In determining the appropriateness of Hofstra's response, the court analyzed whether the response was “immediate or timely and appropriate in light of the circumstances, particularly the level of control and legal responsibility the employer has with respect to the employee's behavior.” Id. The court found that each time Summa complained, Hofstra reacted immediately and appropriately, including disciplining the players involved, and provided training to the entire athletics department to prevent future incidents of harassment. The court concluded that “[b]ecause defendants took the needed remedial action in this case, the harassment carried out by some players on the football team cannot be imputed to the University and its personnel.” Id., 708 F.3d at 125.

Other Federal Appellate Decisions on Harassment by Non-Employees

The Second Circuit's decision is consistent not only with the EEOC's guidance, but also with the other federal appellate courts that have addressed this issue. In EEOC v. Cromer Food Servs. , 414 Fed. Appx. 602 (4th Cir. 2011), an employee of a food services company responsible for restocking vending machines in various locations faced constant ridicule regarding his sexual orientation by one of the company's customers. Despite the employee's multiple complaints to supervisors, the food services company continued to dismiss the incidents as mere “joking around.” Eventually, after the employee filed a complaint with the EEOC, the company offered to place him on an alternative “early shift,” for less hourly pay. The Fourth Circuit reversed the district court's grant of summary judgment in favor of the employer, holding that the employer could be “liable if it knew or should have known of the harassment and failed to take appropriate actions to halt it.”

In Turnbull v. Topeka State Hosp. , 255 F.3d 1238 (10th Cir. 2001), a psychologist employed by a state mental facility complained to supervisors about the dangers of sexual harassment posed by many of the patients. Following these complaints, which went unaddressed, the psychologist was sexually assaulted by a patient, and sued the hospital for its failure to adequately respond to her prior complaints.

Consistent with the EEOC guidelines, the Tenth Circuit found that the employer hospital could be held liable for failing to adequately protect against such harassment by its patients. “The negligence analysis can be divided into two separate inquiries, looking 'first, into the employer's actual or constructive knowledge of harassment, and second, into the adequacy of the employer's remedial and preventative responses.'” Id., 255 F.3d at 1244 (citations omitted). Notably, the court held that although “it would be impossible to eliminate all potential risk” in an inherently dangerous environment, like a state mental hospital, the fact-finder must still determine “whether the hospital took reasonable measures to alleviate known or obvious risks.” Id., 255 F.3d at 1245.

Similarly, in Galdamez v. Potter , 415 F.3d 1015 (9th Cir. 2005), the Ninth Circuit extended the scope of employer liability for harassment by non-employees to include not only sexual harassment, but also harassment based on race and national origin. There, plaintiff Arlene Galdamez, the postmaster for Willamina, OR, received multiple threats of violence against her by various constituents, which included remarks about her race and Honduran national origin. When Ms. Galdamez complained about these threats to a supervisor, she was told that “Willamina was a 'redneck town' and that she was 'tough' enough to deal with the treatment.” 415 F.3d, at 1024-25. Ms. Galdamez brought claims against the Postal Service because of its failure to remedy the ongoing harassment by Postal Service customers.

The court acknowledged that “an employer may be held liable for the actionable third-party harassment of its employees where it ratifies or condones the conduct by failing to investigate and remedy it after learning of it.” Applying this standard, the court held that the trial court erred by failing to instruct the jury on the scope of the Postal Service's potential liability.

The Seventh and Eleventh Circuits have similarly concluded that employers may be liable for harassment by third parties where they know of the harassment and fail to take prompt remedial measures. See Dunn v. Wash. County Hosp ., 429 F.3d 689 (7th Cir. 2005); Watson v. Blue Circle, Inc. , 324 F.3d 1252 (11th Cir. 2003).

Other federal appellate courts, including the Courts of Appeals for the First, Third, Sixth, and District of Columbia Circuits, have not had the opportunity to address the EEOC's guidance on this issue. The unanimity of the decisions by other federal appellate courts, however, suggests that the EEOC guidance will likely become the operative rule in
all jurisdictions.

Lessons for Employers

The facts and circumstances of the cases discussed above suggest some general principles that employers should follow to ensure compliance with Title VII when confronted with claims of harassment by non-employees.

First, it is critical that employers maintain reporting policies that provide employees with a meaningful opportunity to complain about harassment issues. Indeed, employers risk being charged with “constructive knowledge” of harassment, even in the absence of employee complaints, if employees do not have a meaningful process through which to raise concerns. Id., 708 F.3d at 124.

Second, employers may be charged with “actual knowledge” of harassment when an employee reports his or her concerns to a supervisor, even when the company's harassment policy requires the employee to report offensive conduct to another designated person. Cromer Food Servs. , 414 Fed. Appx. at 607-08. Accordingly, companies should encourage all employees ' including both complainants and any supervisors who learn of complaints ' to report grievances to the appropriate personnel.

Third, employers should be reminded that the protections apply to all forms of employee harassment, not just sexual harassment. See Galdamez v. Potter , 415 F.3d 1015, 1022 n.5 (citing AMTRAK v. Morgan , 536 U.S. 101, 116 n.10 (2002)). Companies should be aware not only of the federal prohibition against harassment based on “race, color, religion, sex, or national origin,” as set forth in Title VII, but also of state and local laws that protect against other forms of discrimination and harassment, such as sexual orientation.

Fourth, employers should take all complaints of harassment seriously and not minimize the potential impact of offending conduct. In a number of the reported cases, employers invited potential liability by dismissing complaints as “horseplay” or “joking around,” and advising employees to “grin and bear” the harassment as part of the job.

Fifth, employers should avoid the temptation merely to remove the employee from the situation causing the concerns, because such removal may not qualify as “appropriate corrective action.” According to one court, proposing a change in work shifts or other accommodations to avoid harassment are “per se” unacceptable if they act to the disadvantage of the complaining employee. Cromer Food Servs. , 414 Fed. Appx. at 607-08.

Sixth, employers should take into account the extent of the company's control over the individuals charged with harassment, as this impacts the analysis concerning the appropriate level of corrective action under the circumstances. For example, a university has more control over its students (and therefore may be required to take additional steps to remedy harassment) than a company has over its customers.

Finally, as with all instances of discrimination and harassment, employers should make sure that they conduct thorough investigations of any complaints. Employers should also keep a well-documented record of their prompt response and corrective action. This response and the corrective action should be proportional to the degree of control exercised over the non-employees.

Anthony B. Haller is a partner, and Andrew B. Cohen is an associate in the Employment, Benefits and Labor group at Blank Rome LLP. They can be reached at [email protected] or [email protected], respectively.'

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